Commodities, Energy, Metals and Agriculture

Energy • OPEC agreement: Members of OPEC finally came to an agreement on a production cut, with the group agreeing to cut output by 1.2MMbbls/d to 32.5MMbbls/d starting 1st January 2017. Meanwhile OPEC have an understanding that an additional 600Mbbls/d of cuts will come from some nonOPEC members, including Russia. The decision is positive in the short term, but stronger prices should see US output picking up moving forward. • US inventory data: Receiving little attention yesterday, the EIA released its weekly report, which showed that US crude oil inventory fell by 884Mbbls/d, while market expectations were for an increase. However there were large stock builds in gasoline and distillates over the week.

Metals • Chinese import quotas on gold: According to reports the Chinese government has restricted licences to domestic banks for gold imports, in an attempt to help stop a weakening in the renminbi. Sustained restrictions in imports could see even further pressure on gold, which fell more than 10% over November. • Norsk Hydro aluminium outlook: Norsk Hydro estimates that primary aluminium demand has grown around 5% over 2016, and expect in 2017, for global demand to grow between 3 and 5%. They are also expecting that the primary aluminium market will be largely balanced over 2017.

Agriculture • Egyptian wheat imports: The General Authority for Supply Commodities (GASC) in Egypt bought 240,000 tonnes of Russian wheat at a tender this week. This takes total GASC purchases since the start of July to 2.58m tonnes, lower than the 2.83m tonnes purchased by the same stage last year. The country has had issues with trade interest in tenders this year, given confusion around its policy regarding ergot in wheat. • Honduras coffee exports: Shipments from Honduras reached 188,7777 bags over the month of November, a significant increase from the 89,960 bags exported at the same time last year. Higher output is the reason behind stronger imports, the local association earlier in the year estimated that 2016/17 production would total 7m bags compared to around 5.4m bags in the 2015/16 season.